The European Central Bank: Decision Rules and Macroeconomic Performance

Paul Degrauwe, Hans Dewachter and Yunus Aksoy

Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: In this paper we analyze the effects of different decision rules in the ECB on monetary stability. We consider a model where asymmetric shocks and divergent propagation of shocks on output and inflation are potential causes of tensions within the ECB concerning the conduct of monetary (interest rate) policy. Given divergence of desired interest rates (due to the asymmetries) we analyze the effect of different voting procedures within the Governing Council of the ECB. Welfare implications are discussed.

Date: 1998-12
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Working Paper: The European Central Bank: Decision Rules and Macroeconomic Performance (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:ces9834

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